Law enacted to speed legal process for development disputes

Developers and municipal leaders in Maine say a new state law enacted Wednesday will help prevent opponents of development from killing real estate projects with lawsuits that take years to resolve.

The law pertains to legal challenges filed by neighborhood groups, adjacent landowners or other parties who disagree with municipal approval of a proposed real estate project. It is designed to speed up the judicial process by referring disputes directly to the Maine Business and Consumer Court if any party requests it. It also gives the Supreme Judicial Court the option of expediting the appeal process “in the interests of justice.”

The original 'midtown' proposal, approved in January 2014, would have built up to 850 new apartments in Bayside. Developers eliminated hundreds of apartments from their proposal in response to a drawn-out lawsuit, and as of May 2016, construction of the scaled-back project has yet to begin.

The law is a direct response to threats made by opponents of the proposed Midtown complex in Portland’s Bayside neighborhood, said Gary Vogel, a Portland attorney who serves as legislative committee chair for the Maine Real Estate & Development Association.

Vogel pointed to a December 2013 Press Herald article in which one Midtown opponent, landscape architect Peter Monro, was quoted as saying, “The power to delay is the power to destroy.”

Patrick Venne, a former land use attorney and city planner now involved in the Midtown project, said expediting legal disputes will help lift the “big cloud of uncertainty over any development once it gets appealed.”

He noted that in 2007, a proposed high-rise condominium project at Forest and Cumberland avenues in Portland was effectively destroyed by a legal challenge that, although it ultimately failed, delayed the project long enough that the Great Recession hit and the condo developer decided not to move forward.

“This effort to streamline things really reduces the amount of time people will have to hold their breath,” Venne said.

LESS TIME IN COURT

The law’s passage could shorten the process of resolving legal disputes over major development projects by months or even years, said Portland attorney Andrea Cianchette Maker, a lobbyist for MEREDA.

Originally, Maker said she lobbied for a law that would refer land use disputes directly to the Supreme Judicial Court, but members of the state’s judiciary objected. Still, the business court, which is designed to resolve cases within 10 months, must accept major land use disputes under the new law, she said.

Maker noted three other legal disputes over development in recent years that would have been expedited by the law. They involved a proposed Hannaford grocery store in Turner, a quarry in Bangor and a hotel in Bar Harbor. All three disputes took at least two years to work their way through the courts, she said, and in all cases the municipality’s original project approval ultimately was upheld.

During a Judiciary Committee hearing in May 2015, representatives of eight organizations spoke in support of what was then a bill called LD 775, including the Maine Municipal Association, the Maine Association of Realtors and the Associated General Contractors of Maine. No groups spoke against it.

At the hearing, Maker told the Judiciary Committee that some developers have questioned whether it is worthwhile to build anything in Maine because of the state’s onerous and lengthy judicial review process, which she said can take longer than four years in some cases. Maker said passage of the law would make it harder for opponents of growth to use the court system to stifle real estate development in Maine.

“Unfortunately, opponents of a development project recognize that these judicial delays can be fatal to a project, and filing appeals has become a tactic to defeat a project merely through the delay that stops the project for years,” she said. “Every party is entitled to an appeal, but the appeals process should not be utilized principally for delay, which happens too frequently, discouraging development in Maine and economic growth that our state vitally needs.”

The law only applies to “significant municipal land use decisions,” which it defines as decisions on buildings with a footprint of at least 10,000 square feet or total size of at least 40,000 square feet, a development site of at least three acres, or projects involving at least 10 lots such as a residential subdivision.

A CHILLING EFFECT ON DEVELOPMENT

Maine Municipal Association lobbyist Garrett Corbin told the Judiciary Committee that the long duration of judicial appeals has killed significant real estate projects in Maine. Most of the projects already had undergone a lengthy review at the local level before winding up in court, he said.

“Land use developments do not occur in isolation from each other,” Corbin said. “When major development proposals are hung up for years in the courts and ultimately abandoned, land use activity in that area comes to a standstill. Even long-term land use planning becomes difficult for the affected neighborhoods in the community.”

Scott Lever, chief legal officer for the Associated General Contractors of Maine, told the committee that the new law would encourage economic development and make Maine a more attractive place for private investment. Lever said “time-consuming, project-killing delays” have become more frequent lately, especially in the greater Portland area.

“Across all sectors of Maine’s construction industry, developers and contractors alike appreciate a predictable and efficient permitting process,” he said. “It hurts our industry and Maine’s economy in general when projects are delayed to the point of abandonment.”

The legislation passed in both the House of Representatives and Senate with bipartisan support in late March. It became law Wednesday without Gov. Paul LePage’s signature. It will take effect 90 days after the current Legislative session’s adjournment, tentatively scheduled for April 20.

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